The aim of this work was to first synthesize biocompatible nanocomposite (chitosan beads loaded nickel-oxide nanoparticles) (CTS/NiO NPs) and then study its potential application towards adsorption of anionic azo dye, Congo red (CR), from wastewater. The newly synthesized and characterized NiO nanoparticles were immobilized onto chitosan beads to prepare CTS/NiO NPs, which was characterized by using Scanning Electron Microscopy (SEM), Energy Dispersive X-ray Spectroscopy (EDX) and Fourier Transform Infrared (FT-IR) analysis. The effects of different system variables such as initial dye concentration, contact time, reaction pH, adsorbent dosage and temperature were investigated and based on the results optimal experimental conditions were ascertained. The results revealed that the amount of CR adsorbed on the adsorbent increases with increasing initial dye concentration and by decreasing pH. The Langmuir isotherm was the best-fit adsorption isotherm model for the experimental data obtained from the non-linear chi-square statistic test. Kinetic studies showed that the adsorption of CR followed pseudo-second order kinetics. Thermodynamic studies revealed that the adsorption process was spontaneous and endothermic in nature.